Kodak gets US$765 million for drug business, in move to cut US dependence on China and India

Kodak gets US$765 million for drug business, in move to cut US dependence on China and India

Trump administration has been seeking to bolster ability to produce medicines after coronavirus pandemic exposed reliance on foreign supply chains

Photo industry giant Eastman Kodak will get a US$765 million loan from the US government to produce pharmaceutical ingredients in the country, helping reduce dependency on other countries by strengthening domestic supply chains.

The US International Development Finance Corp said on Tuesday it would sign a letter of interest to provide the loan to Kodak, a company known more for its cameras and imaging business.

The loan is the first of its kind under the Defence Production Act in collaboration with the US Department of Defence. It is intended to speed the production of drugs in short supply and those considered critical to treat coronavirus, which may include hydroxychloroquine, the controversial antimalarial drug touted by President Trump.

The Trump administration has been looking to bolster the ability to produce drugs and their raw materials in the United States after the coronavirus pandemic exposed the industry’s dependence on China and India for its supply chain.

This is the beginning of American independence from our pharmaceutical dependence on foreign countries, White House trade adviser Peter Navarro said in an interview with Fox Business network.

In May, the administration awarded a contract worth up to $812 million for a new US company to manufacture drugs and drug ingredients in the country.

Read More: Singaporean pleads guilty in U.S. to working for Chinese intelligence

By the time this thing ramps up, 25% of the for generics we need in the United States is going to be right at that facility, Navarro said in the interview.

New York-based Kodak, which was founded in 1888, has a market capitalization of $114.6 million. The loan will allow it to launch Kodak Pharmaceuticals, a new arm of the company that will produce critical pharmaceutical components.

The money could provide a lifeline to Kodak, whose business and shares were devastated by the switch to digital cameras. Kodak shares jumped as much as 350% to $11.80 each as of 12.30 pm in New York. The stock has not traded above $5 in more than two years.

The ingredients in hydroxychloroquine are among those being targeted, according to a Dow Jones report.

The antimalarial medicine has been touted by President Donald Trump as a treatment for the virus responsible for the pandemic, although scientists like the national virus expert Anthony Fauci have said it is not effective against coronavirus.

Read More: Protester shoots fellow protesters while trying to shoot driver on Colorado Highway